- (1.) The Tribunal, Delhi, has referred the following question of law under Section 256(1) of the IT Act, 1961 (hereinafter referred to as "the Act"), for opinion to this Court : "Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in holding that the investment allowance was allowable to the assessee under Section 32A on generator ?"
(2.) The reference relates to the asst. yr. 1986-87.
(3.) Briefly stated, the facts giving rise to the present reference are as follows : The respondent-assessee has been assessed to income-tax in the status of a registered firm. It is engaged in the business of manufacturing and sale of surgical and plastic products. It has installed a generator costing Rs. 96,955 and claimed investment allowance. The AO disallowed the investment allowance on generator on the ground that it is not a machinery for the purpose of manufacturing, etc. as it is only used for generating electricity which is the substitute of power. Feeling aggrieved, the respondent preferred an appeal before the CIT(A). The CIT(A) has allowed the claim by following the earlier order dt. 16th Sept., 1987, relating to the asst. yrs. 1984-85 and 1985-86. The order of the CIT(A) has been upheld by the Tribunal.;